Corporate Tax Information

CHARITATABLE TAX DEDUCTION
Section 170(e)(3) of the Internal Revenue Code allows corporations an additional tax deduction when they donate their inventory to 501(c)(3) nonprofit organizations such as Tractors for Our Daily Bread (TFODB).

The total deduction equals the donor corporation’s cost of the inventory, as shown in their accounting records, plus one-half the difference between fair market value of the donated inventory and the donor corporation’s cost. The total deduction cannot exceed twice the cost of the inventory items.

Donor’s cost + 0.5 (market value – donor’s cost) = Total Deduction

OTHER CONDITIONS
The donor corporation can only claim this additional deduction for inventory items; not for capital items such as equipment. Also, the donor corporation cannot have already written the items completely off their books.

The donor corporation must obtain a statement from the charity that the use of the donated property meets the requirements of Section 170(e)(3). TFODB furnishes the required documentation to the donor corporation.

Feel free to contact TFODB to discuss how this additional tax deduction might help your corporation.

IMPROVE CONTROL OF YOUR EXCESS INVENTORY
You can claim these important tax deductions and manage your excess inventory while helping TFODB’s efforts. We handle all processing, documentation, and distribution.